🚫 MYTH: “I’ll be completely overwhelmed trying to complete quarterly submissions for MTD – it’s like doing four tax returns a year!”
Many sole traders and landlords fear that Making Tax Digital will quadruple their administrative burden. The thought of preparing detailed submissions every three months feels overwhelming, especially when they’re used to gathering everything once a year. This misconception stems from comparing quarterly updates to the comprehensive annual Self Assessment process, creating unnecessary anxiety about workload and complexity.
✅ REALITY: MTD quarterly submissions are straightforward summary updates, not mini tax returns, and they actually make your tax management easier throughout the year.
What Quarterly Submissions Actually Involve
MTD income tax quarterly updates require you to submit quarterly summaries of your income and expenses to HMRC TAXguide 01/25: MTD income tax | ICAEW, but these are far simpler than many people imagine. You’re not completing a full tax return four times a year – you’re providing basic income and expense figures that your MTD-compatible software calculates automatically.
The quarterly submission typically includes:
- Total income for the quarter
- Total allowable expenses for the quarter
- Basic summary figures generated by your software
The Hidden Benefits of Quarterly Reporting
Rather than overwhelming you, quarterly submissions offer significant advantages that transform how you manage your business finances:
Better Cash Flow Management: With quarterly reviews, you’ll have a clear picture of your financial position every three months. This means no more year-end surprises about tax bills or discovering expenses you forgot to claim.
Spread the Workload: Instead of the January rush to gather 12 months of receipts and records, you’re maintaining your records regularly. HMRC would like to encourage records to be kept in as near to real time as possible, but it will still be possible to create the digital records at quarterly intervals TAXguide 01/25: MTD income tax | ICAEW.
More Accurate Tax Planning: Quarterly insights allow you to estimate your annual tax liability accurately throughout the year, helping you set aside the right amount for tax payments.
Early Problem Detection: Quarterly reviews help identify issues like missing expenses or categorisation errors before they become significant problems at year-end.
Making Quarterly Submissions Manageable
Your MTD-compatible software does most of the heavy lifting. Modern accounting platforms like Sage, Xero, or FreeAgent automatically categorise transactions, calculate totals, and generate the required submission data. Many users find the actual submission process takes just minutes once their records are up to date.
Professional Support Available: If you work with an accountant, they can handle the quarterly submissions for you, reviewing your figures and ensuring accuracy. This provides professional oversight while maintaining the benefits of regular financial monitoring.
The Long-Term Payoff
Business owners who’ve adopted similar digital reporting systems consistently report that the quarterly rhythm becomes natural quickly. Instead of dreading tax time, you’ll develop confidence in your financial position throughout the year.
HMRC’s evaluation of MTD shows that around two-thirds of businesses (67%) felt that using compatible software has reduced the potential for mistakes in at least one aspect of their record keeping One year until Making Tax Digital for Income Tax launches – GOV.UK.
The quarterly structure transforms tax compliance from an annual burden into an ongoing business management tool that provides valuable insights for decision-making.
Making Tax Digital’s quarterly approach isn’t about creating more work – it’s about distributing your existing obligations more evenly throughout the year while providing better financial visibility. The result is less stress, more accurate tax management, and valuable business insights that support your growth and success.
Contact AHBS Limited: 0115-932-9888 or book: https://tidycal.com/simonahbs/mtd
